AGL Energy has issued a profit warning because of a persistent fault at the Loy Yang power plant in Victoria but is pushing ahead with its planned demerger.
The outage is expected to cost $73 million if it is fixed by August, with the impact split between this financial year and the next, Australia’s largest electricity generator said in a statement to the ASX on Monday.
Out of action for the second time in three years, AGL disclosed last month that an electrical fault at the coal-fired power station had wiped a quarter of its generation capacity. An engineering review continues.
But AGL said it was proceeding with a planned split into two parts, with shareholders due to vote on June 15.
If approved, shareholders will receive one share in the new AGL Australia company for every one share in AGL Energy, and their old AGL Energy shares will be renamed Accel Energy.
AGL Australia will take on the retail operations, including large business customers and AGL’s share of ActewAGL.
Accel Energy plans to turn existing generation sites into lower emission industrial hubs and develop renewable assets.
AGL said Unit 2 at AGL’s Loy Yang A plant was taken out of service on April 15 because generator rotor insulation had failed.
The lack of electricity available to transfer from Victoria to NSW as a result has been a factor driving up power prices across the grid, according to the Australian Energy Market Operator.
AGL said it was reviewing whether any upcoming planned outages across its assets can be shifted to help offset the shortage from the key plant.
The financial impact of the outage is not covered by insurance, it said.
